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The recent small drop in gas prices has been nice, but not overly exciting since it’s still a high price to pay for a tank of gas and considering that gas prices are rising again according to a recent MarketWatch article. People are searching for any way possible to cut their gasoline bills and if condensing errands, telecommuting and carpooling aren’t enough, one can always cut to the chase and try to save money at the point of purchase. Looking for gas stations with the lowest prices is a given, but another technique is growing in popularity: the gas rebate credit card.
In an online survey conducted a few months ago by CardRatings.com, over 1,300 respondents illustrated consumer interest and action in saving money at the gas pump through credit cards. Although a press release was issued immediately after the end date of survey, the purpose of this article is to attempt to dissect and better understand the survey results.
Respondents were asked questions ranging from how much they typically spend on gas per month to how much of a rebate they receive on their gas rebate credit card (if they used one). The results emphasized the fact that those who utilize gas rebate credit cards do find them effective at helping them to save money.
Knowing About Them vs. Using Them
One of the most interesting findings of the survey was that while almost 70% of those responding to the survey were aware of credit cards that offer rebates on gas, only 34% have such a card. Why such a discrepancy?
Curtis Arnold, founder of CardRatings.com and a nationally known consumer advocate, says this wide gap could be caused by several different types of consumer thought.
Arnold speculates that some cardholders may think that having a credit card specifically for gas purchases is too much of a hassle while others may be trying to maximize earnings on an existing credit card reward program by placing all purchases on that one card.
“The wide gap between those numbers suggests that people may be a little hesitant about gas rebate cards and may feel skeptical about whether they can actually help ease the pain at the pump” he adds.
But a key finding of the survey suggests that gas rebate cardholders do feel like they are indeed realizing savings at the pump. In response to the question “How effective do you think your gas rebate cards are when it comes to saving money on gas?”, over 95% of those responding feel that their rebate cards are effective, with the breakdown as follows:
“Somewhat Effective” – 30.8%
“Effective” - 30.1%
“Very Effective” - 34.4%
Under five percent of respondents say that their gas cards are ineffective at saving them money.
Perhaps the major factor behind these numbers is that 81% of respondents hold a gas rebate credit card with a 5% rebate (it is worth noting that a few 5% gas rebate cards have scaled back their rebate percentage since the completion of this survey).
Do Gas Rebate Cards Really Work?
With many gas rebate cards currently offering a 2-5% rebate, a little number crunching shows that gas rebate credit cards are probably worth looking into. After all, one would be hard-pressed to find such an aggressive offer in another type of credit card rebate/reward program.
For example, say you were in need of a fill up and saw a gas station offering gas at $2.00 per gallon. But you also know that another station a block or two down the street was offering gas at $1.90 per gallon. So you keep driving, right?
Ok, then consider this: If you are the holder of a gas rebate credit card that offers a five percent rebate on gas purchases, and the best deal you can find is $2.00 per gallon, that five percent equates to you spending $1.90 per gallon rather than two dollars.
If you are already the holder of a rebate card, and you utilize that card for all of your purchases to maximize the amount of your reward, consider the same scenario. Perhaps your current rebate card gives you a 1 percent rebate on all purchases; basically, this equates to you spending $1.98 per gallon. At 15 gallons, that’s only 30 cents deposited to your card. Quite a jump down from the above $1.50! Furthermore, it is worth noting, that your savings would even be greater if gas is above $2.00 per gallon in your local area.
Arnold relates that the most popular gas rebate credit cards include other products in their rebate programs as well, allowing a consumer to maximize their earnings power. Most also allow at least a 1 percent rebate on all other purchases made with the card. He cautions, though, that it is important to note that any larger rebates may be limited time special offers or in quarterly rotating categories that require you to enroll and that may have quarterly limits.
“I would challenge consumers to take a look at their current card rebate program and the rewards they have recently collected. Then compare it to the potential rebate earnings of a gas card rebate program. Not many other types of cards offer such an aggressive rebate, which can be up to 5 percent. Moreover, many gas rebate cards these days don't limit your rebates to one particular brand of gas. Once a consumer analyzes their spending, they may find that they can realize significant savings by using a gas rebate credit card or other type of rebate card."
Part Two of this series will take a look at other findings from the CardRatings.com gas rebate credit card survey. In the mean time, you are welcome to review the complete survey questions and survey results.
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